Billions tagged to promote cola brands
More than Bt3 billion in marketing funds are expected to be splashed by Pepsi, Coke, Big Cola and "est" of Serm Suk as they fight for share in the cola market worth more than Bt30 billion. The lavish marketing campaigns will stir up competition in the cola segment, which is 80 per cent of the Bt38-billion carbonated beverage market. The soda market is expected to grow by 5 per cent next year.Thailand is one of the few markets in the world where Pepsi outsells Coke. Jagrut Kotecha, general manager for beverages at Pepsi-Cola (Thai) Trading, claimed last week that Pepsi had earned 50 per cent of the cola segment. Despite the split from its long-time bottler and distributor Serm Suk, Pepsi is still committed to long-term investment in the country.
PepsiCo, the US-based beverage giant, has said it was ready to inject US$600 million (Bt18.4 billion) in this market over three years to strengthen the company's leading position and drive future growth. The budget includes a $170-million bottling plant at the Amata City Industrial Estate in Rayong, which was taken over from San Miguel in February.
Pepsi-Cola will ditch returnable glass bottles, for which the market is on a downtrend, and replace them with multi-range and multi-size non-returnable PET bottles and cans, which are seen as growth packaging categories.
Jesdakorn Taratip, marketing director for Pepsi-Cola (Thai) Thai Trading, said part of this investment will include significant marketing spending to further build Pepsi-Cola's strength in the market through campaigns related to music and sports - two areas that serve as strong platforms for PepsiCo's brands around the world.
Pepsi-Cola's previous marketing campaigns, such as its partnership with Thai superstar band Toon Bodyslam, made it a clear favourite in Thailand.
In the coming months, PepsiCo will launch a campaign to emphasise the experience that Pepsi-Cola can offer to consumers. To enthral the fans of Pepsi and music, Pepsi has partnered with GMM Grammy to present "Big Mountain Music Festival 4" next month, which is one of the biggest music festivals that attracts the new generations.
"There will be a surprise this year to excite our fans," he said.
Serm Suk, which launched its est cola on Friday, will spend Bt300 million on marketing in the last two months of this year and Bt900 million in all of next year to promote awareness of the new brand among consumers.
President Dhitivute Bulsook said the company aims for est to generate Bt8 billion in sales and grab 25 per cent of the cola market in the first year. The company has set an ambitious target for est to become the segment leader in three years.
The est deployment marks a signifi?cant turning point for Serm Suk as well as the beverage industry.
"We are ready to rise to the challenge of leveraging Serm Suk's more than 59 years of experience and expertise to penetrate the Bt38-billion local carbonated soft drink market. Ultimately, we will enter all carbonated soft drink cate?gories, which include cola, flavoured and lemon-lime beverages, under a single-brand strategy to build est as a top brand in the near future," he said.
The Thai market was unique in that returnable glass bottles represent 60-70 per cent of the soda pop market, with plastic bottles and cans making up the rest.
Coca-Cola (Thailand) plans to take advantage of the divorce between Pepsi-Cola and its local bottler Serm Suk by pour Bt200 million into a marketing blitz this quarter to leapfrog Pepsi and become the clear leader of the Bt38.5-billion fizzy-drink market.
Archawat Chareonsilp, public affairs and communications director, said Coke's campaigns since the beginning of the year have been very successful because they have been very well planned.
"The outcomes have been just as we hoped they would be, and that is why we are able to strengthen even further our position as the leader of the sparkling beverage market. During this year, our market share in sparkling beverages has jumped from 49 per cent to 54 per cent, while our sales this year have grown by 20 per cent," he said.
"In addition, we have some very exciting and innovative marketing plans for next year and are confident about keeping our leadership position as Thailand's No 1 sparkling beverage company. We recently completed implementing our 'C Day' campaign, which is the biggest product sampling campaign that we have ever conducted, distributing one million bottles of Coke within one day, nationwide.
"The campaign was very well received and we reached our true target customers to build brand preference," he said.